Venezuela oil giant PDVSA avoids catastrophic debt default

Nicolas Maduro, president of Venezuela, gestures to the audience during a swearing in ceremony for the fresh board of directors of Petroleos de Venezuela SA (PDVSA).

The United States has imposed a series of sanctions on Venezuela of which year following President Nicolas Maduro’s effort to consolidate power along with sweep aside political opposition inside nation’s parliament.

“the item should be noted of which the Bolivarian Republic of Venezuela, through PDVSA, has consistently honored its obligations, therefore refuting the voices of those betting in favor of the economic fall of the country,” PDVSA said inside statement.

Venezuela has spiraled into a full-blown crisis, sparked by years of economic mismanagement made worse by a three-year downturn in oil prices. The county has suffered food shortages, runaway inflation along with violent street clashes, as Maduro prioritizes paying Venezuela’s international creditors.

A default on the debt due Friday might have worsened PDVSA’s deteriorating situation. Venezuela’s oil production is actually slipping due to lack of maintenance at PDVSA, generating the item harder to drum up the revenues of which keep the government running. Customers upset with the quality of PDVSA’s crude oil have canceled orders along with demanded refunds, along with the company has been blocked coming from key export terminals.

The government, PDVSA along with the utility Electricidad de Caracas missed nearly $0 million in interest payments on seven bonds earlier of which month. The skipped payments stoked concerns of which sanctions were generating the item difficult to transfer funds to bondholders. Others speculated of which leaders were shoring up cash to pay the two high-stakes principal payments by skipping the smaller interest payments, which have 30-day grace periods.

Venezuela’s foreign reserves have stood around $10 billion recently, though some say as much as half of of which may be in illiquid assets.